Crystal McKendrick says an expensive mortgage makes her worried that she can’t afford to live in the city, which is where all the work is.
Photograph: www.glennhunt.com

For as long as any of us can remember, society has struck an “intergenerational bargain”. The younger generation agrees to support and look after their predecessors as they age. The older generation agrees to leave the world a better place for their offspring. But now, according to a new report, that bargain is under threat.

Young Australians today face the prospect of being the first generation in living memory to be worse off than their parents, the Grattan Institute warns in its Generation Gap report.

While Australian household wealth has nearly tripled over the past three decades, that growth hasn’t reached everyone equally. “Households headed by someone aged 65-74 have an average equivalised net wealth of $1 million today, up from about $600,000 just 12 years ago. Meanwhile younger households have made barely any gains compared to a household of the same age 12 years ago,” the report says.

During that same period, poorer young Australians have seen a downward trend in their wealth.

Rising house prices, high debt, stagnant wages and under-employment all threaten young people’s ability to progress as much as their parents did. The report dismisses the stereotype of a millennial financial hedonism, finding that young people today are spending less on non-essential items than in the past.

“If low wage growth and fewer working hours is the new normal in Australia, then we could have a generation emerge from young adulthood with lower incomes than the one before it at the same age,” Grattan Institute’s Danielle Wood warns. Such is already the case in the US and UK.

What do young people think of their progress and prospects? Six young Australians share their stories.

Arshdeep Cheema, 22, public health student, Melbourne

I love the perception that young people are spending all their money on avocado breakfasts, because the majority of my girlfriends are some of the stingiest people you’ll ever meet. Especially when you do come from a migrant background, you’re very pushed to understand the value of money. So you grow up going, “Yeah, I have to save at every possible moment.”

Right now I’ve got a budget spreadsheet. I make sure I count my savings, count any expenditure right down to a coffee. I think if anything we’re very aware of what we spend our money on. But I think it comes down to the individual. I am sure it’d be the exact same 20 or 30 years go.

I migrated here when I was two from India, from Punjab. My parents’ experience was very, very hard from what I know. My mum always tells me she never bought anything for herself. There was a fear we wouldn’t have food on the table. I don’t think we have that because we can always fall back on our parents. But I do think we don’t have the same options as they had.

Arshdeep Cheema migrated to Australia aged two from India and says her parents’ experience was very hard

Honestly, I don’t see so much inequity, because the majority of the ageing population around me are still working in their 60s and 70s. I don’t think they expect benefits. They feel they have to afford everything themselves.

I think financial anxiety for young people is a very real thing. If we do choose to move out, we will be renting for a few years. There’s really no stability, I’m going to say that straight up. I think a lot of us feel there’s never going to be complete independence from our parents because we’re always going to be afraid of having to ask them for money at some point.

Chloe Blancato, 21, commerce student and personal trainer, Sydney

I work three to four jobs, and on top of that there’s uni. Personal training is one of my main jobs. Babysitting would be five to 10 hours a week. The fitness for childcare job is around Sydney, driving to and from centres, so the days are full-on. But it’s fun. I’m happy with it. I’d be working 26 to 30 hours a week. Uni is alright, but I’m honestly just in and out. I just tend to stick to myself, focus on my studies. University life would just be another distraction for me.

It’s not too tiring. But I’m switched on all the time.

I’m comfortable with where I’m at. I’m saving for holidays and I want to have enough money for a deposit on a unit in a few years. I only started saving about two years ago. But if I wasn’t working all those jobs I’d probably be stressed out.

Both my parents have a really strong work ethic. I’d say they’re pretty well off today. They’ve got investment properties and whatnot. We live comfortably. I still live with them. I wouldn’t take that for granted.

I don’t want to be renting all my life. I see friends do it, and they’re going to be doing it all their lives. Sydney is very, very expensive. It looks like its apartments for all of us. We’re realistic with it. We’ll be probably living way out west, not near the city, not near the beaches. But it’s possible, I think.

It’s a lot of pressure on us, I feel. But that’s life. You just have to go with it. I wouldn’t say I’m happy about it. But I feel there’s nothing we can do about it. Like, yeah, we would feel a little robbed – but what can you do?

D’el Murphy, 23, metalwork apprentice, Sydney

Because I’m still on an apprenticeship, I’m not making an ideal amount. I don’t have the ability to save a lot. I’m living a little bit week to week. Things will change over time, hopefully. I think I’m paid enough. I don’t splurge too much. Being able to live with any amount of pay is all up to you and what you do with that amount of pay.

I haven’t really thought about buying a house, to be completely honest. It’s never really come up for me. From looking at the news, it doesn’t really look like I’m going to be able to afford a place. Watching the reports, it’s never really given me hope to think about it too much, like “Hey! Let’s start saving for a house. Looking cheap at the moment.”

D’el Murphy photographed near his workplace, a roofing company in Rozelle. Photograph: Jessica Hromas/The Guardian

But my parents have never owned a house, so they’ve never really had that. It’s hard to really say whether or not I’m doing better than my parents.

There’s a level of respect that we have to give older people. I’d say courtesy. No one knows every single one of these old people, so to say that they’re stealing our wealth is kind of ridiculous. But there is something weird about how things are going. There does need to be a conversation about whether we need changes so we can get the same chances.

Crystal McKendrick, 27, policy professional, Brisbane

On paper I look better off than my parents. That’s because I’ve come from a lower socio-economic background. I’ve grown up in a regional town and my mum has been on welfare my whole life. I’m technically multi-generational welfare. I don’t have the two parent, white picket fence, middle income family background.

I’m now earning more money than both my parents combined. My mobility has improved. However, I’m also in debt – which is something that wouldn’t have happened many years ago. I’m in debt before I begin because of my qualifications, because of trying to improve my life. So I’m doing worse off in that regard.

I’ve grown up as an only child and I think about who’s going to be looking after my parents in their old age when they don’t have a decent income of their own. They don’t have superannuation or a valuable property. They’re in a rural, remote area, so at some point they’re going to have to relocate to a more expensive location, and they may not be able to afford to do that themselves. That will probably come on to my shoulders.

Crystal McKendrick grew up in a regional town but now lives in Brisbane. Photograph: www.glennhunt.com

Given my background, to think about an expensive mortgage definitely makes me very worried that I can’t afford to live in the city, which is where all the work is. The way that you improve your economic mobility is by having a job. Having a well-paid job. But the well-paid jobs aren’t in the regional areas where housing affordability is a little bit better.

I am quite scared about my future in some respects, but I’m optimistic in some ways because I’m seeing a trend towards people realising that you cannot have an economy without a society. People are starting to realise that at the heart of everything is people; I am seeing that governments at the policy end are trying to address these issues.

George Fayad, 27, social worker, Sydney

I’m currently living with my parents. The main reason is because I would like to enter the property market by buying, rather than through a rental. The state of the property market makes that really difficult for someone just starting out, especially not having a partner or a lot of financial support from family.

Maybe I was a little bit naive, but I thought I’d finish uni, get a job and I’d be out of home within a year. That was what I thought was going to happen. Obviously, the reality is so different.

I have been saving since I was maybe 16 or 17. I remember when I opened my first term deposit, my return back then was actually a lot more than my return is now, even though I have a lot more money now. I think “oh my god, interest rates were so much higher”.

There’s irony everywhere. Obviously, the more I earn the more I get taxed. I have Hecs, and the threshold has just lowered for repaying Hecs debts, so even though I’m earning the most I’ve ever earned as an adult, I’m also getting taxed more than ever before.

When my parents moved here from Lebanon it was a lot different. I wouldn’t even say they “struggled” to buy a home, to be honest. They definitely had a lot more opportunity when they came over to establish themselves in the property market. I think a lot of people in their generation have done exactly that. Because now our generation is renting property owned by their generation.

In 50 years we’re going to be the old people. And we need to start setting ourselves up for that now. If we’re looking at it and seeing there’s a problem that all these younger people are struggling, we need to make sure in 50 years they’re not worse off. But that doesn’t seem to be happening.

Amabel Grinter, 23, dairy farmer, Cobram, Victoria

I work on my family’s dairy farm. It’s really the animals that I enjoy the most. There’s a lot of negativity in regard to animal welfare, and I feel that if I’m part of the industry and I’m looking after my animals the best I can, I can make a difference.

I’ve been out of uni for 18 months and within those 18 months things have just got tougher and tougher for the dairy industry. Especially in our area with water security being a really massive issue. We’re looking into the future and wondering if there’s going to be a dairy industry in our area in 10 years’ time.

I would be a fourth generation dairy farmer, but the farm that my parents are on is first generation. It wasn’t handed down to them or anything. They worked to get that farm themselves. The end goal of owning your own farm, I think most people would still see that as a possibility – it’s just about what age you get to that point, and how large the farm is you’re able to purchase.

I’m finding it really hard. Every day I’m finding people are less and less optimistic within that older generation and that makes it really hard for young people coming through to have positivity towards it. I’m still really passionate about the industry and think there’s really a lot of good being done in it. But from a leadership view it’s hard to find the optimism. That’s probably the hardest thing at the moment.

There’s people in the older generation who are struggling as well. Older people who do have money have worked hard all their life to be in a situation where they can have that. I think where tax change needs to happen is probably more in addressing how the system is skewed to help large businesses. Rather than attack a generation, I think it needs to be based on income – because they’re some young people who are doing bloody well, as well.